Property stocks
What are your current thoughts on property stocks such as CNI , CIP & DXS which continue to underperform despite interest rates appearing to have peaked in Australia. Thanks
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Answer
Hi Ian,
It depends on time frames. We think they are offering deep value here, and we are happy to buy CNI & DXS for our Income Portfolio. We believe they will turn around once central banks confirm that policy is sufficiently restrictive for the prevailing economic conditions. We think this is close, but we’re clearly not their yet according to Jerome Powell. We are not ‘betting the farm’ on this view, but we do have patience and we think we are near a peak in rates and therefore a low in property stocks like DXS and CNI.
NB: CNI is a major shareholder in CIP, holding ~16% of the stock, so there is cross over.
